R S Capital Partners Pty Ltd (RS Capital) has paid a $10,800 infringement notice penalty after making potentially misleading representations about the cost of setting up a self-managed superannuation fund (SMSF) using RS Capital's services.
ASIC's concerns related to representations contained on the My SMSF Property website in February and March this year.
The representations were that fund set up was free, however, conditions applied to the 'free' set up that were not clearly disclosed on the website.
ASIC was concerned that although advertised as 'free', conditions for fund set up included an accounting services fee of $1,100 per year for a minimum of two years.
ASIC Deputy Chair Peter Kell said, ‘Accuracy in advertising is integral to maintaining consumer trust and confidence in the SMSF sector. ASIC will continue to take action where we see advertising that might mislead consumers.'
ASIC acknowledges that RS Capital immediately took steps to correct its advertising and is developing improved processes for the sign-off of advertisements.
The payment of an infringement notice is not an admission of a contravention of the Australian Securities and Investments Commission Act 2001 consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe that a person has contravened certain consumer protection laws.
Since 1 July 2013, ASIC has received 218 reports of misconduct relating to SMSFs and real estate and/or property.
In response to the growth in self-managed super funds, an increase in geared investment strategies and the parliamentary joint committee inquiry into the collapse of Trio, ASIC established the SMSF Taskforce. The Taskforce meets regularly to examine high risk and emerging SMSF issues such as property spruiking to SMSFs, unlicensed conduct and misleading or deceptive advertising.
We have released guidance to improve the quality of advice provided by advisers on SMSFs, their costs and the risks associated with them. See: INFO 205, INFO 206 and Report 337 Improving the quality of advice given to SMSF investors. (refer: 13-081MR).